English, Article, Journal or magazine article edition: No Taxation without Infrastructure Stefan Gruber; Luigi Marattin

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Bookmark: http://trove.nla.gov.au/version/145213
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • No Taxation without Infrastructure
Author
  • Stefan Gruber
  • Luigi Marattin
Physical Description
  • preprint
Notes
  • This paper presents a New Economic Geography model with distortionary taxation and endogenized transport costs. Tax revenues finance a public good, infrastructure. We show that the introduction of costly public investment in infrastructure leads to more pronounced agglomeration patterns. With respect to the regions sizes, in the periphery, the price-index for manufacturing goods decreases, whereas for the core, the price-index is rather high since the distortionary effect of taxes dominates. Free riding is beneficial for the periphery, which can devote all its tax revenue to local demand support, generating a positive home market effect and driving the catch-up process.
  • New Economic Geography, Taxation, Endogenous Transport Costs, Infrastructure
  • RePEc:rim:rimwps:11-07
Language
  • English
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